AFPM ’19: Latin American PVC prices erode amid global weakness

HOUSTON (ICIS)–Latin American polyvinyl chloride (PVC) prices started to erode heading into this year’s International Petrochemical Conference (IPC), on the back of weak market fundamentals across the globe.

The moderate March price increase initiatives are not finding support due to weakening PVC prices in Asia and slow regional demand.

Additionally, regional demand is expected to remain soft into the second quarter due to lack of new projects that could invigorate the economies of those countries.

The long PVC supply situation in Asia, with Taiwan’s Formosa not selling out for the month, prompted most Asian suppliers to offer discounts in domestic and international markets in order to move material and prevent high inventories.

This situation created expectations of lower April resin prices in the Americas. But the price decline turned imminent as Taiwan’s Formosa Plastics announced its April export offers at a discount of $50/tonne to China and $60/tonne lower for India.

Offers of US product into the Latin American region were heard at $860-870/tonne CFR (cost and freight) South America. However, buyers were confident that further negotiations would yield numbers some $30/tonne lower.

February displayed a completely different price scenario. PVC prices in Latin America inched up in February as most suppliers announced price increases citing a global uptrend. The proposed increases ranged from $10-88/tonne, but the implementation was assessed in a $10-25/tonne range.

Argentina saw a $25/tonne increase, while countries in the Pacific coast of South America (Chile, Peru, Ecuador and Bolivia) experienced slightly firmer values. Mexico increased $22/tonne in February after prolonged negotiations that had started at an $88/tonne increase. Colombian suppliers increased their export February prices by some $20/tonne in most cases.

Unipar Indupa, Braskem, Unipar Carbocloro, Mexichem and Pequiven are PVC producers in Latin America.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 24-26 March in San Antonio, Texas.

Focus article by Luly Stephens